Mafia plot to swindle St Paul's

An extraordinary attempt by fraudsters linked to the Mafia to defraud St Paul's Cathedral of £100million has been defeated by detectives, it can be revealed today.

A gang of international criminals described as "brilliantly clever, sophisticated and unscrupulous", had opened extensive negotiations with the highest ranking officials controlling the finances of the cathedral offering a bogus donation of £50million if the church deposited £100 million in a ring-fenced account.

They claimed the US Federal Reserve would pay high rates of interest on large sums of money put on short-term deposit.

Astonished church officials were staggered by the offer at a time when £40million was urgently needed to fund a programme of cleaning and repairing of the stonework.

But the ingenious plan could have bankrupted the church and it would have given the fraudsters three lucrative options. They could have stolen the money, stolen the interest or used the deposit as a surety to pull off another fraud. The conspiracy grew larger and larger and even sucked in the unwitting Prince Khalid of Saudi Arabia.

The prince was present at a meeting when undercover City of London detectives who had been called in by St Paul's and were posing as financial advisers, arrested the gang in the Royal Suite of the Knightsbridge Hotel.

Four suspects, American Joe Lowrey, 67, Andrew Jalassola, 42 from Finland, Italian lawyer Giorgio Rubolino, 41 and Italian Antonio Barea, 28, faced various charges including conspiracy to defraud and using a false instrument.

But Jalassola was granted bail and has fled to the US and Lowrey, who originally pleaded not guilty but changed his plea to guilty on the grounds of insanity, also jumped bail.

As a result the Crown has been forced to drop the charges against Rubolino because in their absence he could not receive a fair trial as they could not be cross-examined. Today Judge Christopher Elwen entered a formal not guilty verdict to the charge of conspiracy to defraud against him.

Barea has pleaded guilty to using a false instrument and will be sentenced next month.

The remarkable tale starts in September 1998 when two men, posing as worshippers approached Canon Stephen Oliver after Sunday morning service.

They were Tony Foster and Ron Wood who started the original fraud but then disappeared as it careered towards its climax.

They told the canon that the cathedral was obviously expensive to run and that they wished to make a substantial donation.

The canon got in touch with the cathedral's financial controller Kenneth Stones who was responsible through the cathedral registrar to the Dean and Chapter. Wood told Mr Stones that they wished to offer £50million and the matter was passed to the registrar Brig Robert Acworth.

Foster and Wood arranged a meeting at which Lowrey, posing as a senior bank official of Credit Suisse in Geneva, offered Brig Acworth the £50million said to have been the residue of funds raised for film production.

The offer was on condition that the cathedral put £100million on deposit for 14 days which would remain under their control but its very existence would "trigger" the donation paid from an off-shore account.

As St Paul's officials called in the police, while Lowrey took over the running of the fraud, persuading others to come to London to pose as representatives of the US Federal Reserve. Eventually the police moved in in June 1999.

Lifting reporting restrictions today Judge Elwen said that it was "in the public's interest that reporting of these proceedings should not longer be inhibited".